Saab bankruptcy sideswipes N.H. dealers, owners, mechanics

Published: December 22, 2011

[UPDATED]The bankruptcy of Swedish automaker Saab will make it tough for owners of the vehicle who need repairs in New Hampshire and beyond, according to those who own Saab specialty repair shops in the state.The Swedish automaker, long known for its innovation and uniquely styled vehicles, filed for bankruptcy on Dec. 19 after General Motors blocked its sale to Chinese investors.The bankruptcy filing did not come as a surprise to those who follow the brand, which has been in financial turmoil for much of the year as it has searched for a buyer to keep it afloat.Spyker Cars -- the Dutch luxury sports car maker that purchased the brand from General Motors in early 2010 -- essentially "ran out of money real quick," said Roland St. Sauveur, a Saab master technician and an owner of Dean Hill Saab, a Saab repair shop and used Saab dealer in Charlestown.In early April, the Saab factory stopped production when some suppliers cut off shipments due to unpaid invoices. Then, in June, it said it didn't have enough money to pay its 3,700 employees.By late October, Spyker had struck a deal to sell Saab to two Chinese companies. But GM -- which had owned Saab before selling it to Spyker and still retained some of Saab's technology licenses -- blocked the deal, saying that it would refuse to supply technology and components to the brand if the Chinese investors took it over.GM's rejection of the rescue plan forced the company into bankruptcy. Saab technicians in New Hampshire were quick to lay the brand's demise at the feet of GM."They blocked the sale. At the end of the day, they're the bad guys," said Paul Noury, who has owned Saabtech in Barrington for 21 years; he said he'll stick with the shop's name, and continue to service the brand, but may have to diversify his services more in the future.But Jim Cain, a spokesman for GM, denied that the company blocked the deal. He said that the two Chinese investors came in when Saab was literally hours from being forced into bankruptcy by Swedish courts."The issue for us was, you had this company that had gone from being in crisis, on the absolute brink, and you had outside investors coming in with the expectation that they would get cheap access to GM technology, and we couldn't let that happen for a lot of reasons," said Cain."We didn't veto the sale -- we simply said that if the sale went through that we wouldn't license the technology, and that is what caused the investors to walk away."Parts problemsNevertheless, Saab techs in the state feel that GM could and should have kept the company afloat by licensing its technologies to the Chinese companies, as it had been doing with the Swedish Spyker."It's going to be real difficult for us to get parts because of what GM has done," said Dean Hill Saab's St. Sauveur.Noury said obtaining replacement parts has already been a challenge, since production has been on and off all year. "We've been running high and dry on a lot of parts now for six months or more."And it's the consumers who are getting the rough end of the deal, since many Saab components, like door panels and keys, are very high-tech and not available on the aftermarket he said."You can't even drive your car without certain replacement parts, and the whole parts line is shut off like a light switch," he said. "That aspect of it is really going to hurt the consumer big time."Plus, since the company is being liquidated, the parts that already have been manufactured by Saab are now locked away, their fate yet undetermined, he said."I never thought they could hold inventory like that," he said. "To me, it's almost illegal for people with new cars to not get parts."Noury does expect that the parts will eventually become available, but when, which kind, and how many is still up in the air.Fixing older Saabs won't be as difficult, since used and aftermarket parts are more readily available, but repairing vehicles from the last few years will be much more challenging, the technicians agreed.What's also unclear at this point is the fate of the two Saab dealerships in New Hampshire, Gary Blake Saab in Exeter and Tracy Banks Saab in Concord. Neither dealership returned calls before deadline."The poor dealers have been holding on, hoping for a prayer, now they're left out in the cold," said St. Sauveur, who guesses that they won't shut down but will become used car dealerships -- which they've been forced to be most of this year anyway, he said."It's just sad," said Ralph Brutus, owner of Brutus Repair Shop in Manchester, which specializes in Saab repairs. "I have a lot of personal friends in the business that work for Saab, and they'll be losing their jobs." -- KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW

This article appears in the December 16 2011 issue of New Hampshire Business Review